Florida Health Insurance Advisory Board Meeting Report: June 11

The Florida Health Insurance Advisory Board (“FHIAB/Board”) held a public meeting on Thursday, June 11, 2009, in Tallahassee.  Chaired by Florida Insurance Commissioner Kevin McCarty, the Board discussed the search and selection of a permanent executive director, final 2008 assessment actions, the proposed 2009 Board Budget, and other pertinent actions related to the 2009 Florida Legislative Session and United States Congress.  To access the complete agenda, click here. 

The FHIAB was established by the Florida Legislature in 1992 as the Small Employer Health Reinsurance Program.  In 2005, the Legislature expanded the Board’s responsibilities to include an advisory role on health insurance issues to the Florida Office of Insurance Regulation, Agency for Health Care Administration, the Department of Financial Services, other executive departments and to the Legislature.

Commissioner McCarty noted that the meeting was timely, in that this week yielded important health care legislation news:  On Tuesday, June 9, U.S. Senator Ted Kennedy, Chairman of the Senate Committee on Health, Education, Labor and Pensions, released a proposed overhaul on the health-care system, known as the “Affordable Health Choices Act.”  The next day, Florida Governor Charlie Crist signed into law House Bill 675 relating to Medicare Supplement Policies, known as the “Alonzo Mourning Access to Care Act,” along with the contentious Senate Bill 1122 relating to Health Insurance/Payment of Benefits/Claims Forms.

 

Board member Harry Spring reported that the search and selection process for a permanent executive director is underway.  FHIAB Staff is hoping to complete the preliminary round of interviews by the first week of July and submit candidate recommendations by the end of that month.

FHIAB Interim Executive Director Carol Ostapchuk reported on 2008 final assessment actions.  Last year, the Board approved assessments of $40,000 on the FHIAB Small Employer Health Reinsurance Program and $25,000 on the Individual Reinsurance Program.  The Board passed a motion to reconcile the 2008 assessments.

Ms. Ostapchuk said that the Board used $95,000 of its 2008 approved budget of $103,000.  Regarding a 2009 proposed interim assessment, she recommendation that the Board maintain the 2008 figures in order to offset expenses.  A motion was passed to approve the 2009 proposed interim assessment.

Ms. Ostapchuk noted that there was nothing unusual regarding FHIAB investments.  One CD has renewed this year and, although returns are well below four percent, investment income remains stable.  The 2008 audit is completed and currently undergoing peer review.  No comments of a critical nature have been received.  The audit report will proceed to Audit Committee and be finalized in next two months.

 

Florida Deputy Insurance Commissioner Mary Beth Senkewicz outlined the two health insurance-related bills that were signed Wednesday by Florida Governor Charlie Crist.

HB 675 was championed by former Miami Heat basketball player Alonzo Mourning, who received a life-saving kidney transplant.  The bill expands the availability of Medicare supplemental policies to Medicare beneficiaries with end-stage renal disease.  Prior to the legislation, Florida law only guaranteed Medicare supplemental policies, known as Medigap, to Medicare beneficiaries over age 65.  With this change in policy, Florida joined 28 states that currently allow younger patients with end-stage renal disease to access the supplementary coverage as well.  

Initially, the healthcare industry was concerned about the large cost of the bill.  However, care for the disabled under age 65 is less costly than for those who are older and suffer from end-stage renal illness, so it benefits the risk pool to include this population.  Until 2015, insurers will have the ability to adjust the rate pool for the end-stage class and the under-65 disabled population.

SB 1122 was one of the more controversial bills to be passed during the 2009 Florida Legislative Session.  The bill changes the way insurance companies pay for coverage of patients in insurance networks by allowing doctors who are not members of a preferred provider organization to be paid directly by insurance companies when they treat patients who belong to such a plan.  A coalition of advocates for workers, consumers and employers had urged Governor Crist to veto the bill, warning that it would result in higher and unexpected out-of-pocket health care costs, while the Florida Medical Association applauded the Governor’s decision to sign the bill.

 

Update on Pending 2009 Federal Legislation

Ms. Senkewicz said that the current administration and Congress are turning their efforts to implementation of health information technology as a way to curb expenses.  President Obama’s $787 billion stimulus plan, officially known as the American Recovery and Reinvestment Act of 2009, allots $19 billion for health information technology, including electronic health records that could be equally accessed by clinicians, diagnostic facilities, hospitals and pharmacies.

A Congressional Budget Office (“CBO”) cost estimate released in March 2009 reported that expanded use of health information technology could “reduce on-budget direct spending for health benefits by Medicare, Medicaid, and Federal Employees Health Benefits programs by $12.4 billion” over the 2009-2019 period.  The CBO reported that the offset in spending increases will come from the reductions in Medicare spending in later years, resulting in a savings after 2014.  The added benefit is the accelerated use of the cost-saving technology’s effect on the private insurance sector, resulting in lower health insurance premiums for employers.

An additional health insurance-related benefit included in the stimulus plan was a provision allowing for extension of the period to elect the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) for employees involuntarily terminated after September 1, 2008.  Eligible individuals pay only 35 percent of their COBRA insurance premiums and the remaining 65 percent is reimbursed to the coverage provider through a tax credit.

 

On Tuesday, June 9, the U.S. Senate Committee on Health, Education, Labor and Pensions, chaired by Senator Ted Kennedy, released a broad health insurance-related proposal known as the “Affordable Health Choices Act.”  The bill would require most Americans to buy health insurance and would create government-run exchanges where these policies could be purchased.  It also calls for a new government health-insurance plan and indicates employers would be required to help pay for employees’ plans.  To see a copy of the bill, click here.

Earlier this year, Senator Kennedy and Senator Max Baucus, Chairman of the Senate Finance Committee (which shares jurisdiction of health care reform with the Health Committee) established a joint process that is expected to lead to legislation being on the Senate floor by July 2009.  A public hearing on the Affordable Health Choices bill was scheduled for Thursday, June 11.  The Committee was scheduled to discuss bill provisions, including the public option and employer mandate.  The mark-up process is scheduled to begin on Tuesday, June 16, during which the bill will be debated, amended and rewritten.

Ms. Senkewicz noted that, because Senator Kennedy is gravely ill, Senator Christopher Dodd has been leading the efforts on the health care bill.

In the U.S. House of Representatives, three Committees have jurisdiction over the health insurance issue: Energy and Commerce, Education and Labor, and Ways and Means.  The Committees released a joint statement on Tuesday, June 9, announcing progress on their collective version of health reform.  To read the draft outline, click here.

President Obama, who told Congress that he wants a health reform bill on his desk by November, reiterated his support for a “pay-as-you-go” system for health care and other new federal benefit programs in order to avoid increasing the national debt.  That plan would require Congress to pay for new spending either by raising taxes or cutting the budget.

FHIAB Board members praised the Senate Committee’s Affordable Health Choices Act, although most expressed concern that its greatest flaw might be in overreaching.  Commissioner McCarty said last week in Washington, D.C., he met with U.S. Health and Human Services Secretary Kathleen Sebelius, a vocal supporter of the healthcare reform legislation.  He was pleased that the Senate proposal aims to protect the states’ integrity by preserving the state regulatory system. 

Board members questioned whether there would be potential demographic issues regarding health reform for Florida, considering its large senior population.  Commissioner McCarty agreed the Board should explore whether provisions in the Affordable Health Choices Act for those age 60 and older would affect Florida more than other states.

 

FHIAB Board member Tom Warring gave an update on implementation of the Cover Florida Health Care Access Program for uninsured Floridians.  The program, which contracts with United HealthCare and Blue Cross, had approximately 2,400 enrolled on April 30. 

The Cover Florida program provides that a policyholder is required to have been without insurance coverage six months prior to enrollment, unless he or she has lost a job.  Board members discussed the possibility of removing the six-month waiver and will continue to explore modifications to the plan.  For complete information about Cover Florida, click here.

 

Should you have any questions or comments, please contact Colodny Fass.

 

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